Tag: pre approval

How to Get Your Offer Accepted

tips to get your offer accepted

If you have been searching for a house in the last couple of years, you will be familiar with what the real estate industry calls a “lack of inventory”.  This means that there are more people looking to buy houses than there are people interested in selling homes and there is more competition on each home.  This imbalance causes a housing shortage which can be a frustrating situation for families looking to buy a home and makes getting your offer accepted a tough task.

The housing shortage has created a spike in home prices. According to the National Association of Realtors, “The median existing-home price for all housing types in March was $250,400, up 5.8 percent from March 2017 ($236,600).” This increase in prices has been affecting home affordability nationwide.

Infographic from http://www.simplifyingthemarket.com/en/2018/04/27/existing-home-sales-grow-despite-low-inventory-infographic/

Locally in West Michigan, it is very difficult to find affordable homes under the $200,000 range. For first time homebuyers and those looking to downsize they are seeing multiple offer situations and bids far over the home’s listing price. Some desperate buyers are going as far as to waive their right to inspections and guaranteeing to pay above appraisal amounts. For those that do not have access to large amounts of cash, they may have a hard time competing with their bids.

How to Get your Offer Accepted to Buy a Home in a Sellers Market in Michigan

Getting your offer noticed in a stack of multiple offers is not an easy feat. Many sellers are reviewing several offers for their home and simply disregarding lower priced offers and also offers with contingencies and what they consider riskier financing. Here are 8 tips on how to make your offer stand out and get your offer accepted to buy a home in Michigan.

1) Get a Strong Pre-Approval to Strengthen your Offer

To get your offer accepted there are several things a buyer can do. First of all you should speak with a local, knowledgeable, licensed loan officer that can Pre-Approval you for the strongest type of mortgage that you can qualify for. Typically sellers see conventional as the best type of financing because it has less requirements for the home’s condition than other loan types and can close quickly. Receiving a strong pre-approval from a local lender will put you a leg up on the competition with generic automated letters from the big national companies.

2) Consider Alternatives to Seller Paid Closing Costs

If a buyer does not have enough funds to cover their own closing costs then it is a common practice to ask the sellers to pay their closing costs as part of their offer. The sellers will view this as additional costs and reduce their proceeds from the sale. Alternatives to Seller Paid closing costs should be considered including:

  • Pay your own closing costs
  • Ask about low down payment or zero down loans
  • Get a gift from a family member for your costs
  • Ask the lender for lender credit option to reduce your costs
  • Look for ways to reduce your closing cost by shopping insurance and title company fees

3) Give the Sellers Occupancy After the Closing

Many sellers are hesitant to sell because they are fearful that they will not be able to find a new home in time to transition their belongings to a new house. It may help to calm their fears by giving them extra time to move after you close on the purchase of their house. It is common these day to offer 30 days after close for the seller to vacate the property. This may be an important reason why they choose your offer over others.

4) Personalize your Offer By Writing a Letter

As cheesy as it sounds to write a heart felt letter, my experience shows that it works! Many times there are a lot of emotions and memories that come with a house. It may be the place where they raised their children.

They may have put sweat and tears into building the house. It might have been a house that was in the family for generations.  All these factors compel the sellers to want to make sure it goes to a deserving family that will appreciate it as much as they do. Simply tell them why your happy little family would be deserving and that you will take great care of the place.

5) Offer to Pay Seller’s Closing Costs

If you have access to cash and feel strongly about getting your offer accepted, you could offer to pay for the sellers closing costs. In Michigan, Property Transfer Tax and Owner Title Insurance are typically paid by the seller unless otherwise agreed to by the buyer. If a buyer agrees to pay the sellers closing fees, the sellers would net more from the sale and walk away with more money.

6) Remove Contingencies from your Offer

Many times families will have contingencies before they can buy. For example, if you plan on selling your home before buying your next home, then you may write your offer contingent upon the sale of your home. This is a risky unknown for sellers. Your house may take a long time to sell which would not work with the seller’s timeline.

If you are able to qualify for a new home while still owning your other home, then it may be advantageous to submit your offer without a contingency for the sale of your home. Other contingencies you could remove would include appraising at sales price, or even waiving property inspections. These should be carefully considered as a last resort to get your offer accepted.

7) Adding an Escalation Clause as Part of your Offer

Speak with your real estate agent about how an escalation clause may work for your situation. In general, a clause would be added stating that if someone else offers higher than your offer, you will automatically increase your bid higher than theirs. You would want to make sure you set a cap on the maximum amount you are willing to offer.

8) Ask your Loan Officer to Call the Listing Agent to Confirm your Pre-Approval

Having a loan officer that will go above and beyond to fight for you is an important part of buying a home. Studies show that having a local loan officer versus a big bank or online lender increases the strength of your pre-approval. Part of a seller’s concern when reviewing offers on their home is that the buyer’s financing may fall through. If your loan officer has already received your documentation and confirmed that you are a well qualified buyer, then ask them to call the listing agent to confirm the details and give the sellers confidence in accepting your offer!

To review home loan options with a Licensed Loan officer simply complete the form below to request a free consultation or call us now at 1-800-555-2098.

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The Mortgage Process: What Happens After Pre-Approval

Congratulations! You passed the pre-approval stage for getting a home, but what happens next?

Once you have a pre-approval letter from your lender, you can start looking for a home to purchase. Keep in mind that the letter is only good for 60 to 90 days, depending on the type of approval you received.

Why Should I Get Pre-Approved?

A pre-approval gives you an edge when shopping for a home because realtors and home sellers know you are already qualified to buy, according to a lender’s standards. It also means your time from agreeing to buy and closing will be faster, since approval is already done. During your search, keep the lender estimates in mind. It is an amount you can comfortably afford for a home. It is not advisable to go above it.

Once you have found a home that meets your needs and your pre-approval amount, you can start the sale process by giving the seller the pre-approval letter and making an offer on the house. If the seller accepts your offer, the next step is to start the underwriting process.

 

What is the Mortgage Underwriting Process?

Now that you have an accepted offer on a house, you will work with your loan officer to sign an official mortgage application. This will start the loan process and allow us to submit your application to underwriting for approval. If you have not yet provided the supporting documentation to verify the information on your application you will need to do this now. These documents will include income, assets, and credit documentation.

Required Documents to Apply for a Mortgage

  • Drivers License
  • Social Security Card
  • 1 Month Paystubs
  • Most Recent 2 Year W2 Statements
  • Most Recent 2 Years Tax Returns (if self employed or commission)
  • 2 Months Bank Statements
  • Most Recent Quarterly Retirement Statement
  • Home Owner Insurance Quote

(Additional Documentation may be required in Underwriting. Not all borrowers will need to present these documents – Ask us about our Automated Home Loan process where we electronically verify your information.)

Once your application is signed (we use electronic signatures to speed up the process), then your loan is submitted to an underwriting. The underwriter will review the information to confirm that it matches what was submitted on your application. They may have questions or request additional documentation at this time. Once your loan is “Conditionally Approved” in underwriting we will move to the appraisal.

What Happens During the Appraisal Phase?

An appraisal takes into account the interior of the home, the exterior, and the value of surrounding homes in the neighborhood. Once the appraisal is over, the loan can be processed. An underwriter will process the loan and clear the loan for closing. The appraisal must come in either greater than or equal to the value of the purchase price. If it comes in low you may need to bring additional cash or renegotiate with the sellers.

Once through processing, your loan will be scheduled to close. This is where you will sit down with an escrow agent or a notary to make everything official and legal. 

The Final Stretch: Closing Costs

The last part of the process, before you can start packing up your moving boxes, is the closing. Closing costs are what you pay for outside of the home itself. So, if you get an appraisal, the appraiser needs to be paid for their services. In addition, there is title insurance fees, taxes, tax services, and other fees that come with closing. These fees can range anywhere from 0-5% of the cost of the loan. 

If you negotiated that the sellers will pay these closing costs and pre-paid items then they will cover them at the closing otherwise these fees will need to be paid by you at the time of the close. If you are short on cash, ask your loan officer if you qualify for lender paid closing costs. This is where we will give you a credit at the close to cover some or all of your 3rd party fees. You will always need to cover your own down payment funds (unless a special program allows differently).

In summary, to start buying a home, the first step is the home loan pre-approval. Be sure to make an appointment with a Riverbank Finance professional loan officer today by calling (800) 555-2098.

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How to get pre-approved for a mortgage

Things to avoid when buying a home in Michigan.

If you are new to the home-buying process, you are probably aware that one of the best first courses of action is to get pre-approved before you start house hunting. So, you head to your bank or financial institution, but you have no idea what goes into the process of pre-approval. What do you need to get pre-approved? What should you expect? Here’s the low-down.

What is mortgage pre-approval?

First comes first. What is pre-approval, and why is it so important? Pre-approval is the first step to getting a mortgage. Your lender will take a look at your finances, your credit history, and your employment and determine whether you can afford to buy a home and, if you can, how much of a home you can afford to buy. That will help you narrow down your choices as you search for the right home within your budget. Getting pre-approved will also show home sellers and their realtors that you are ready to buy.

What do you need to get pre-approved?

To help the pre-approval process go smoothly, before you sit down with a mortgage professional, make sure you check your credit reports. Resolve anything negative, such as bills in collections, and dispute any errors. For most loan programs the disputes will need to be resolved and closed out prior to your loan application. This will give you the highest and most accurate credit score for mortgage qualifying. Higher credit scores will allow for a quicker loan process with lower interest rates.

Throughout the mortgage process, don’t apply for any new credit cards, don’t take on any new debt or make any large purchases, don’t close any of your current credit accounts, and don’t ask any of your creditors to lower your credit limit. These could significantly alter your chances of getting a mortgage.

Pre-Approval Document Checklist

  • Drivers License
  • Social Security Card
  • Most Recent 2 Years W2 statements
  • Most Recent 2 Years Tax Returns (If Self Employed or Commission Based)
  • 1 Month of Paystubs
  • 2 Months of Bank Statements
  • Quarterly Retirement Account Statement
  • Proof of 12 Month Rent History (may not be required)

For pre-approval, you’ll also need to provide documentation of the last two years of tax returns; proof of income including W-2s and pay stubs; a written referral letter from your landlord with some proof that you’ve been paying your rent in time (such as carbon copies of checks or money orders); two forms of government identification such as drivers license and social security card; and proof of income from other sources, such as government assistance and child support. Lastly you will need to document any assets. This will include any money you have in stocks, IRAs and retirement accounts. Also make sure the money for your down payment and closing costs are in the bank, ready to go.

Request a mortgage pre-approval by phone or online

Once you have gather the required documentation you can call a loan officer at 1-800-555-2098 to get start over the phone or apply online at https://riverbankfinance.com/app which is our online secure loan application.  A licensed loan officer walk you through the pre-approval process and help to review all available loan options.  Many times we are able to issue a pre-approval over the phone or online within minutes.

What happens when you get pre-approved?

Once you are officially pre-approved your loan officer will provide you with a Pre-Approval Certification. This document will state that we have reviewed your loan eligibility and have determined that you are likely to qualify for the loan program given. Your Realtor will ask for this document before you start shopping for a home. You may also want this updated prior to writing an offer on a home to make sure it matches your bid.

Related: Visit our Mortgage Calculators to estimate mortgage payments

So, when you’re feeling ready, come and visit us here at Riverbank Finance, and we can help you start the pre-approval process. Call us at 800-555-2098 to schedule an appointment with one of our professional loan officers. We want to help you get into your new home!

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Pre-Approval Process to Buy a Home in Michigan

Pre-Approval for Michigan HomesPreviously we went over the process of picking the proper real-estate agent for your home hunting needs so the next step is to determine the best mortgage program.  Most people do not have thousands of dollars in savings to buy a home with cash so a mortgage will be necessary.  A statistic from the National Association of Realtors (NAR) is that 9-of-10 homebuyers purchase homes through a loan program so it is important to know what loans are available.

First we should probably explain what the term “pre-approval” means.  The process begins with you meeting a loan officer, which can help you determine what type of home you can afford.  It then continues onto a review of your credit files to ensure they are in good standing.  The loan officer will then determine which specific mortgage program is best for you.  From there you’ll receive a pre-approval certificate stating your maximum borrowing potential. Riverbank Finance loan officer will assist you in shopping interest rates and closing costs with several banks at the same time.

Most people can get a loan, as long as they’re willing to pay high interest.  The key to connect yourself with a good mortgage company that can find a loan for your current situation that has the best terms and lowest cost.  This is where Riverbank Finance comes into play as we specialize in helping you determine the best possible loan options available.

If you are a first-time homebuyer or even a repeat homebuyer they you will need help with a pre-approval.  We can go through the process with you and answer any potential questions you may have about the pre-approval process.  Just fill out the email contact form below to get started.  You can also call us at 1-800-555-2098 and a loan officer will be in direct contact with you from the start of your loan to the closing.

Looking for Pre-Approval?

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